In a large saucepan, combine peaches, 1/3 cup of sugar, cornstarch, lemon juice and cinnamon; toss to coat peaches. Set pan over medium heat and bring to a boil; cook until mixture thickens, about a minute. Remove pan from heat; transfer mixture to an 8 inch square baking dish.

To make topping, combine flour, remaining 2 tablespoons of sugar, baking powder and salt in a large bowl. Work in margarine with a fork until mixture resembles coarse crumbs. Add milk; stir until flour mixture is evenly moistened.